Foreign investors planning to invest in Nigeria and other global markets this year are taking a keen look at the nation’s oil output among other factors.
According to a Financial Times’ report, oil supply from the world’s biggest producers will be in focus from the first trading day of January as market participants assess the extent to which countries such as Saudi Arabia and Russia reduce production following a global deal to cut supplies for the first time since the global financial crisis. There will also be keen interest in the return of the US shale oil and the sustainability of supply recoveries by Libya and Nigeria, conflict-ridden nations that were left out of the output cut agreement.
The outcome of these unknowns will determine when oil supply and demand come into balance in 2017 and whether prices will remain above $50 a barrel. “Until we start to get answers, the debates will continue,” Michael Wittner at Société Générale, said, “Until then, we believe that markets will enter a ‘wait and see’ mode; crude prices are likely to start trading within a relatively wide range,” he added.